What this measures
DSCR asks whether the income figure covers the debt figure. A result of 1.00 means the NOI you typed equals the debt service you typed. Above 1.00, the NOI is larger. Below 1.00, it is smaller.
Nothing here checks credit, reserves, a property type, or a lender's minimum. Do not read the ratio as an approval.
Formula
DSCR = annual NOI ÷ annual debt service.
If debt service is zero or blank, the ratio is undefined and the page shows a dash. NOI and debt service are annual numbers you enter. The page does not convert a monthly payment unless you already multiplied it by twelve.
Example
Example
The sample NOI and debt service below are a check of the division. DSCR is 1.20. Annual NOI is $24,000. Annual debt service is $20,000.
Example. These inputs are numbers you can replace. They are not a property RE Underwrite Lab bought, sold, listed, or inspected.
Questions
Does a DSCR over 1.00 mean I am approved?
No. Lenders set their own minimums and they define income and debt their own way.
Should debt service be monthly?
Type the annual total. A monthly payment has to be multiplied by twelve before it matches this formula.
What is NOI here?
The annual income figure you choose to type, after the expenses you already removed. The page does not compute it from rent.
Is this the same as the mortgage calculator?
No. The mortgage calculator amortizes a loan. This page only divides NOI by debt service.
Can the ratio be below 1?
Yes. That means the NOI you typed is smaller than the debt service you typed.